Due To The Mounting Losses, TCE Was Forced To File For Chapter 11 Bankruptcy

During severe winter weather, the price for electricity on the BES market soared. As a result, TCE was forced to pay considerably higher sums for the energy it had to supply its customers. The resulting losses led TCE to meet with MOD and express their concern that the price spikes were the result of anti-competitive bids and market manipulation. TCE alleged that, at the time of the price fluctuations, TXU controlled anywhere from seventy-five to ninety-nine percent
of the BES market and that it used its market strength to purposefully withhold energy from the market in order to increase the price. TCE argues that while ERCOT made some attempts to forceTXU to rectify the situation, it failed to follow its own protocols. Due to the mounting losses, TCE was forced to file for Chapter 11 bankruptcy. TCE filed suit against twenty-four market participants including TXU, its subsidiaries, and ERCOT. According to the complaint, TCE alleges that the defendants violated the federal Sherman Antitrust Act and the Texas Free Enterprise and Antitrust Act (“TFEAA”). TCE also alleges fraud, negligent misrepresentation, breach of contract, defamation, business disparagement, and civil
conspiracy. The defendants filed motions to dismiss. After holding a hearing on the motions, the district court dismissed TCE’s fraud, negligent misrepresentation, and state and federal antitrust claims on the basis of the filed rate doctrine. The court also dismissed some of the breach of contract and civil conspiracy claims, and denied ERCOT’s motion to dismiss the defamation and business disparagement claims. Having dismissed the federal claims, the district court dismissed the entire
case, finding that there was no basis for diversity jurisdiction on the remaining state law claims. TCE now appeals the district court’s dismissal of its antitrust claims.2 We review a district court’s grant of a motion to dismiss de novo. Martin K. Eby Const. Co.v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004). A complaint “should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957). filed rate doctrine precluded TCE from recovering for its losses under federal and state antitrust law. The filed rate doctrine bars judicial recourse against a regulated entity based upon allegations that the entity’s “filed rate” is too high, unfair or unlawful. See, e.g., Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409 (1986) (filed rate doct rine bars damage action against motor carriers
under antitrust laws even though carriers colluded to set artificially high filed rate). The Supreme Court established this doctrine in Keogh v. Chicago & Northwestern Railway, Co., 260 U.S. 156 (1922). In Keogh, the Supreme Court held that a shipper could not bring an antitrust action against carriers in connection with tariffs paid because those tariffs had been filed and approved by the Interstate Commerce Commission. Id. at 163.

The Court reasoned that even if the carriers had conspired to eliminate competition, the shipper could not recover under antitrust law because it could receive a rebate that might give the shipper “preference over his trade competitors.” Id. Furthermore, the Court held that it was up to the respective governmental agency to determine whether the rates were discriminatory or unlawful, not the courts. Id. at 164. Since Keogh, courts have consistently applied the filed rate doctrine in a number of energy cases to preclude lawsuits against companies based on rates that were filed with a government agency. See, e.g., Ark. La. Gas Co. v. Hall, 453 U.S. 571, 578 (1981) (filed rate doctrine prohibits seller of natural gas to collect a rate different than the one it filed with the Federal Power Commission.); Tex. E. Transmission Corp. v. Fed. Energy Regulatory Comm’n, 102 F.3d 174, 189 (5th Cir. 1996) (natural gas pipeline precluded from retroactively assessing customer rates based on a new and different rate methodology because the prior rates had been filed with a federal agency). “Simply stated, the doctrine holds that any ‘filed rate’))that is, one approved by the governing regulatory agency))is per se reasonable and unassailable in judicial proceedings brought by ratepayers.”